Stick with the fixed rate unless you’re planning to sell the house within 5-7 years.
If your broker is so confident, ask them to guarantee the rates will drop. Spoiler: they won’t. Go with the fixed rate.
Rates could keep climbing. I wouldn’t be surprised if we see double digits in the next couple of years.
What’s the monthly payment difference? The rates seem too close to risk an ARM.
Go with the fixed. If rates drop, you can refinance. If they don’t, you’re protected from rising payments.
Take the 30-Year Fixed. An ARM could cost more if rates increase.
Your broker is selling you something, not guaranteeing anything. Go with the 30-Year Fixed for peace of mind.
Choose the 30-Year Fixed, and if the home inspection finds issues, ask the seller for credits to cover some costs.
What’s the total savings over 5 or 7 years for the ARMs? The small rate difference makes the 30-Year Fixed more appealing.
Rates dropped slightly today, so I’d lock in a 30-Year Fixed. If rates drop more, you can refinance.
Go with an ARM if you’re planning to stay less than 5-7 years. Otherwise, choose the 30-Year Fixed.
The 7-Year ARM is safe enough for most situations. Within 7 years, you’ll likely refinance or sell anyway.
The rates are too close to justify an ARM in this case. Go with the 30-Year Fixed for stability.
Be realistic about how long you’ll stay in the house. ARMs are great if you’re confident in your plans, but the fixed rate offers more security.
Take the 30-Year Fixed with no PMI and no penalty for prepayment.
What kind of 5-Year ARM is it? A 5/1, 5/6, or 5/5? Each has different levels of safety before rate changes.
Here’s a rough estimate for a $500k house with 20% down:
- 5-Year ARM: $2463/month
- 7-Year ARM: $2495/month
- 30-Year Fixed: $2561/month
Run your own numbers and see if the savings are worth the risk of an ARM.